Cost reduction and innovation the key for struggling PV laminator producers25. March 2013 | Top News, Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends, Investor news, Trade cases | By: Jeremy Bowden
Photovoltaic laminator producers see little sign of any upturn in the months ahead, on the back of a tumultuous 2012. Weak demand and factory closures are characterizing the industry, as are overcapacity and U.S. sanctions on Chinese exports. Cost reduction and innovation hold the key to long term survival, however.
Manufacturers who responded to inquiries from pv magazine all reported weak demand and, in one case, acknowledged capacity had been reduced, while rumours of factory closures were widespread in China and elsewhere.
However, some manufacturers are putting their faith in the on-going rapid decline in photovoltaic panel prices, which is keeping upward pressure on panel demand – suggesting a longer-term future, if they can remain in the market. Some even suggest the consolidation among panel producers could be over as early as the end of the year.
Whatever their perspective on the market, to compete for remaining orders laminator manufacturers are continuing to focus on cost reduction, or innovation in equipment or processes that will speed production up or improve automation and quality. Others are simply upgrading models in preparation for an upturn, and have little hope of selling much in the near term.
In one case, innovations in lamination are claiming to have improved the quality of panels so much as to have doubled anticipated lifetime, which means an effective halving in panel costs per unit of electricity generated.
However, those plans are still being developed. The bulk of today’s laminating machine makers produce basic models using established technology and are located in China, alongside the bulk of solar panel manufacturing.
US sanctions impact China
Chinese market research firm ENF Business Consulting estimates that 70% of all laminating machines originate in China, with the bulk sold to Chinese solar panel producers. A spokesperson for Boostsolar, the world’s largest producer with almost a third of global installed capacity in early 2012, according to data from ENF, described current market conditions as "really terrible."
"The Chinese home market is even worse than the export market. This is because of the U.S. sanctions. Chinese companies don’t want to produce more [panels] in China anymore," she said, referring to the tariffs imposed by the U.S. on imports of photovoltaic panels from China.
However, Kit Temple, CEO of ENF, suggested it was overcapacity behind current Chinese problems rather than sanctions. The European Union is considering a move similar to the U.S., which introduced sanctions as a defence against what it claims is dumping (selling below cost) by Chinese companies in the U.S. market. The EU is expected to make a decision by June 2013.
"If Chinese companies want to compete in these countries they must make panels outside China," said the Boostsolar spokesperson. But, while demand for Chinese-made panels for export has been hit by the tariffs, she said domestic demand for panels was strong, although not strong enough to require any expansion of existing manufacturing lines, which she said could easily cope with this local buying. This meant very weak demand for laminators and other panel manufacturing equipment.
A spokesperson for Hebei Yiheng, producer of the Orient brand, with an almost 25% share of installed capacity in China, agreed that market conditions were bad. He acknowledged that some laminator production capacity at his company was not being used, but was unable to comment further. At least one Chinese producer – Gold Solar, based in Qinhuangdao – was said to have closed altogether, while several companies contacted for this report failed to respond or had unobtainable phone lines.
European and US producers
European producers were similarly negative. "No one is replacing older machines, no one is increasing capacity, and there are plenty [of laminators] available in the second hand market from those who’ve left the market," said Vittore De Leonibus, chairman and CEO of Teknisolar, which he founded in 2009.
Panel manufacturer bankruptcies have led to a thriving second hand market for laminators, including at specialist equipment and online auction or trading sites, such as Alibaba.com, and jvg-thoma.de.
The sector is in "deep crisis," said De Leonibus, although he added that Teknisolar itself was relatively well-placed due to a new range of innovative products, its small size, low costs, and because its laminators are just a part of its integrated production line offerings.
The Boostsolar spokesperson added that rising costs at home were also an important factor in weak Chinese demand. "Some Chinese [panel manufacturing] companies are looking for more ways to cut costs because prices keep falling," she said. "They are moving outside China, and we are also seeing more demand for automated [laminator] machinery and less for manual."
Spire Corporation, a U.S. producer of panels and laminator machines, has already announced moves to expand panel manufacture in new turn-key factories in the lowest cost production centres it can find outside the U.S.
Speaking in a webcast, Spire founder Roger Little said the company was targeting production in Bangladesh, India, Africa and South America to ensure low cost and local supply, which is being encouraged by local governments eager to build a domestic solar industry. The panel factories help provide some demand for its laminators.
While Europe used to dominate the world solar panel market with over two thirds of global demand as recently as 2011, growth in developing nations, including India and South East Asia, as well as China and Japan, should lead to further opportunities – not necessarily linked to cost savings – for panel and laminator manufacturers to expand globally as countries seek to attract a solar manufacturing base.
This could be good news for non-Chinese laminator producers, who have sold little product in China, with companies like P. Energy s.p.a. – a major Italian producer with 15 products, mainly catering to the relatively small 10-30MW/year production range – admitting recently that it had never made a commercial sale in China.
However, the reverse is also true according to ENF’s Kit Temple. "Chinese companies will happily take Chinese brand laminators, but Chinese brands will find it hard to sell to European and U.S. manufacturers," he said in an email.
While closures and exits were widely rumoured, one company at least is considering entering the market. A spokesperson for Hanwha in the U.S. confirmed that it was preparing for such a move, with a range of new products, but said it was too early to comment on product specifics or on where the machines would be manufactured.
To compete for remaining demand laminator manufacturers can reduce prices, speed up or improve panel production rates and/or improve the lamination processes and quality. Low cost traditional single panel laminator production is now dominated by producers such as Boostsolar, Hebei Yiheng and, as Indian demand takes off, Hindhivac – built on supply to their domestic panel manufacturers.
Some companies have slashed prices, with China’s Baixin Machinery cutting by as much as 40% in 2012, and EETS of the U.K. by 28%, according to De Leonibus of Teknisolar. Such cuts may be the last resort for producers in trouble, depending on leverage and other factors.
Other companies such as Meyer Burger, Teknisolar, Bürkle, NPC-Meier and Spire appear to be relying more on innovation to maintain market share. De Leonibus said new efficient and advanced laminators, like the ones Teknisolar had developed, could reduce the number of people required to produce 150MW/year of photovoltaic panels from 256 to 26, with the additional costs of its’ advanced models taking cost savings from as little as seven months full operation to pay back investment.
Most revolutionary among the list of innovators, at least among those who responded to a widely circulated inquiry from pv magazine, was Meyer Burger. Speaking for the Swiss company, Chief Technical Officer Sylvère Leu said the company had developed a new solar laminating process in response to the trend towards lower cost and higher quality.
Raw materials and parts
Lower panel prices have increased the importance of raw material costs, such as EVA. Teknisolar’s De Leonibus said it that although EVA was the most widely used material, polyvinyl butyral (PVB) was better due to its structural resistance. He said the company was researching a number of materials including Dupont’s ionomer. PVB is mainly used in thin film production, but process times are currently much longer than that required for EVA, with higher pressure and heat.
Sourcing parts that need replacing on a regular basis from China is another way to reduce costs. This includes the membranes, which need to be replaced every 3,000 cycles, and transport belts, which wear out after 5,000 cycles. The sourcing of components where most laminators operate brings costs down, although it may complicate logistics.
Another approach, followed by Italy’s Teknisolar and initiated by Germany's Schmid, is to remove the membrane altogether. The technology allows savings in operation and maintenance costs, including extra outlays for the membranes. Teknisolar’s De Leonibus said the new product range it launched in 2012 did not have membranes.
As well as avoiding the need for costly replacements altogether, the new range also avoids the risk of panel damage caused if the membrane breaks while in use, which can be costly with multi-panel laminators, he said. However, other producers have cautioned that laminators without a membrane are suitable only for customers that do not change their product specifications.
Across the globe, laminator suppliers are struggling to keep their heads above water as they continue to look forward to a market upturn. In the meantime, most are tailoring their products to better meet the needs of squeezed panel makers, and those best able to do so will be ready to ride the next wave of solar expansion, when it comes – as it surely will.
Read the full article in the April edition of pv magazine, due out on April 4.
Edited by Becky Beetz.
Kit Temple | http://www.enfsolar.com
Tuesday, 26.03.2013 03:30
It's important to point out that Chinese laminator manufacturers are making progress in certain countries (I didn't want to give the impression these companies can't flourish outside China). When ENF surveyed manufacturers in India we found quite a strong uptake of Chinese laminators for example.
Monday, 25.03.2013 18:55
Can we have more numbers? How much were laminators in 2010, 2011, 2012, 2013? You mention membranes - How much do they costs? What's the O&M trend from 2010 to the present? What's the throughput of a 2010 laminator vs. 2013? How much is a new laminator going to reduce costs? That quote about workforce reduction is impressive but it's relative to an unknown base. The article full of great tickles but it needs more concrete.
Choose between a digital and print subscription from pv magazine publisher Solarpraxis AG’s online shop!
- 4928 views
- 4688 views
- 4592 views
- 3538 views
- 2479 views
Want to publish your press releases for free? Simply log in or register, enter the information you want to appear and we'll publish it for you!